Rice import eligibility could be tied to volume of domestic purchases

THE Department of Agriculture (DA) said it is considering a proposal to link eligibility to import rice to the volume of rice purchased from domestic farmers.

Agriculture Secretary Francisco P. Tiu Laurel, Jr. said the proposal would require traders to buy palay (unmilled rice) or rice to receive import allocations.

“You have to buy palay or rice to get an import allocation. That’s the general idea. It’s like they invest in local industries, so that they won’t kill the industry with imported products,” he told reporters on the sidelines of an Economic Journalists Association of the Philippines event late Monday.

Mr. Laurel said the scheme is meant to “self-police” stakeholders in the rice industry and ensure transparent and objective import allocation.

A similar mechanism is already in place for molasses imports, where traders are granted import allocations based on the volume of locally produced molasses they purchase, using a 3:1 local-to-imported ratio.

Mr. Laurel, however, said the specific ratio for rice imports and local purchases has yet to be determined.

The DA said it is consulting industry participants, including importers and rice producers, and has formed a technical working group composed of private sector and department representatives.

“The private sector and the government will discuss this. We’ll ask for the recommendation of the private sector and tweak it a little to come up with a win-win solution,” Mr. Laurel said.

Mr. Laurel said the DA is targeting initial implementation of the system in the second half of the year, possibly by July.

“Our target is, hopefully, by the end of this year, the system will be a bit more solid. Initially, there will be trials first because a certain percentage of the quantity to be imported will be subject to the new system, he said.

Mr. Laurel added that the proposed policy will be waiting on authorization from the Rice Industry and Consumer Empowerment (RICE) Act, which the DA hopes will be enacted by June or July.

The RICE Act, currently pending in Congress, seeks to restore and expand the regulatory powers of the National Food Authority (NFA), which were significantly reduced under the Rice Tariffication Law of 2019. The measure would also grant the government broader authority over the rice trade.

Raul Q. Montemayor, national manager of the Federation of Free Farmers, told BusinessWorld that the proposed local purchase requirement “will not be a problem” as some rice importers are also millers and traders.

“For importers who have no local buying operations, they could easily tie up with local millers or traders or put up their own shell companies,” he said via Viber.

Mr. Montemayor said the proposed scheme would also benefit from additional requirements, such as proof of rice purchase at the floor price or higher. — Vonn Andrei E. Villamiel